Bulletin – June Quarter 2017 How Have Australian Banks Responded to Tighter Capital and Liquidity Requirements? Abstract

Australian banks have responded to tighter regulatory requirements for capital and liquidity over the past decade, which has strengthened their resilience to adverse shocks. While banks are now in a much better position to deal with these types of shocks, this strengthening has also had implications for their funding costs and some key profitability metrics. This article outlines some of the main changes to banks' activities as they have responded to the tighter capital and liquidity requirements.

Summary Figure
Summary Figure: Australian banks' capital and liquidity

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